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Tax Law Analysis Essay


Tax return position is a position about which a receiver of tax services has an understanding of all material details in a tax return and on the foundation of those details has decided that the position is suitable (Murphy & Higgins, 2009).

This essay explores the primary and secondary sources of tax law, substantial authority and the roles of the courts and internal revenue service in interpreting and applying the sources of tax law.

Primary sources of tax law

Primary sources of tax law consist of the law itself which is formed by a government division and is expressed in constitutions, statutes, court decisions, administrative systems and resolution. Primary sources are considered to be moderately more significant as compared to secondary sources.

The sources include statutory sources, administrative sources and judicial sources. Statutory sources or statutory authority includes the constitution, tax treaties and tax laws.

The establishment of treaties with other nations and the power and authority to collect and impose taxes are the responsibilities of the constitution.

Administrative sources on the other hand include the diverse verdict of the treasury and internal revenue service (IRS) which are issued in the form of regulations, revenues and rulings.

Finally, judicial sources consist of the consolidated verdicts of the courts on tax affairs (Smith, Raabe, & Maloney, 2012).

Secondary sources of tax law

Secondary sources of tax law are usually writings concerning the law. The sources are crucial in the advancement and proper comprehension of the law. Secondary sources include articles, journals, newsletters, treaties and textbooks.

Secondary sources are quite superior as compared to primary sources but they are useful in discovering, examining and assessing primary sources.

Secondary sources are normally utilized as a preliminary for research especially when primary sources are unavailable, uncertain or not beneficial.

Substantial authority

Substantial authority is usually used as a criterion for preparation of tax. Substantial authority is a situation that is sufficiently unveiled in the taxpayer’s return, and for which there is a logical basis.

A situation is deemed to have substantial authority when the power of the authorities sustaining the position is significant in relation to the power of authorities sustaining differing treatment.

All tax treatment of the position, including sources opposing to the position are used in establishing the continuation of substantial authority. The significance given to an authority relies on its applicability, influence and the document category offering the authority (Dickinson, 2008).

The role of the courts and IRS in interpreting and applying tax law sources

The Internal Revenue Service is an influential body in many areas apart from its administrative roles. Being the protector of the revenue of the nation, the Internal Revenue Service is responsible for ensuring that the most notorious practice of tax avoidance is stopped.

Tax payers and their advisors have devised various techniques of tax defaulting. The internal revenue service in turn has put in place policies to help in closing the loopholes that taxpayers have noticed and misused.

Moreover, the internal revenue service is also responsible for revenue collection and law administration. In order to ensure effective and efficient revenue collection, internal revenue service placed the taxpayers on a pay as you earn technique.

In addition, it is the role of internal revenue service to make available documents that are designed to assist the taxpayer in complying with the laws of taxation (Murphy & Higgins, 2009).

In the event of a disagreement between the taxpayer and the internal revenue service on the interpretation and application of the code, the issue may have to be settled in the court of law.

The court helps the taxpayer in interpreting the statutory requirements and administrative statements issued by the internal revenue service. The decisions of the court in a dispute are considered official interpretations and applications of sources of tax law.

Therefore, the decision represents primary authority which is deemed superior. In addition, it is the responsibility of the court to determine the facts of a dispute and then interpret and apply the appropriate law.


From the research, it is evident that tax laws are formulated using both primary and secondary sources. Although it is said that primary sources are more superior to secondary sources, secondary sources help a great deal especially when primary sources are unavailable, unclear and unfavorable.

In order for tax laws to be followed strictly, the government has put in place bodies to help in the compliance of tax. The courts and the internal revenue service work hand in hand to ensure effective and efficient compliance with the laws of taxation.

It is evident that taxpayers occasionally try to evade the payment of taxes. This situation is corrected by the internal revenue service by ensuring that all loop holes that encourage tax evasion are sealed.

Moreover, the court also helps the taxpayer in situations where they feel exploited by those who collect taxes. With the presence of the courts, the taxpayer feels protected and is sure to pay only what is necessary, no more and no less.

Reference List

Dickinson, M. (2008). Federal Income Tax. Chicago: CCH Group.

Murphy, K., & Higgins, M. (2009). Concepts in Federal Taxation. Ohio: South Western Cengage Learning.

Smith, J., Raabe, W., & Maloney, D. (2012). South-Western Federal Taxation. Ohio: Cengage Learning.

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